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Equity Release

Rise in equity release lending in last quarter of 2024

Rise in equity release lending in last quarter of 2024
Christina Hoghton
Written By:
Posted:
31/01/2025
Updated:
31/01/2025

Total lending rose for the third successive quarter in the last three months of last year, hitting £622.

That’s 1% higher than the previous quarter and 16% up on a year earlier, said the Equity Release Council.

But lending for the year was still down, at £2.3bn compared to £2.6bn in 2023.

The association for the sector added that the number of plans sold rose 6% on a quarterly basis and 10% annually.

This was driven by existing borrowers, with the number of new plans actually static over the quarter, but a 6% rise recorded in returning drawdown business and a 27% increase in further advances.

Average loan sizes continued to increase for both drawdown and lump sum lifetime mortgages, helped by customers’ available equity being lifted by a 3.3% rise in average UK house prices over the last year according to the latest UK House Price Index.

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David Burrowes, chair of the Equity Release Council, said: “The Q4 2024 data demonstrates encouraging signs of recovery in the equity release market, with three consecutive quarters of growth in lending and total plans for the first time in two years. This is a testament to the resilience of the market and its ability to adapt to shifting economic conditions.

“It’s particularly notable to see a steady increase in returning customers using further advances, with a 27% rise this quarter, reflecting the confidence that homeowners have in leveraging their property wealth responsibly. This is further supported by the gradual rise in UK house prices, which has given many customers the opportunity to access sufficient equity to meet their financial needs.”

Ben Waugh, managing director of later life lender, more2life, added: “The later life lending market is looking increasingly positive. After the difficulties and economic challenges of the last few years, it’s enormously encouraging to see lending increase for three straight quarters and the number of active customers to hit levels we haven’t seen since the latter portion of 2023.

“Lenders and providers have worked hard on product innovation, responding to the expectations of the regulator by devising products which represent industry firsts on criteria, as well as acting as a hybrid between traditional mortgages and lifetime mortgages.

“Yet we are still just scratching the surface of what this sector could and should be. It’s vital for advisers and providers to continue working closely, not just to boost product development, but to open up these products to greater numbers of mainstream mortgage brokers who up to now have shied away from the specialist later life market.”